Business Monday

Gateway City/Trend: Final 2015 trade was off at 11 of top 15 Customs districts

Ken Roberts is president of World City, based in Coral Gables.
Ken Roberts is president of World City, based in Coral Gables.

In 2015, trade fell here, there and most everywhere

South Florida’s trade with the world fell for an unprecedented third consecutive year in 2015, based on the U.S. Census Bureau data just released.

Misery, in this case, loves company. The nation’s trade fell in 2015 as did that of eight of the 11 Customs districts whose trade exceeds that of South Florida.

But only one other Customs district among the top 15 has registered a decline three consecutive years, New Orleans.

Behind much of the bad news is two things: a slowing Chinese economy, which is pushing down commodity prices, and a glut of oil on the market, which is pushing down those prices. Both are affecting Houston and New Orleans, where trade fell $56.03 billion and $34.21 billion, respectively.

While it seems that in the Information Age, in the era of Big Data, with terms like predictive analysis becoming buzzwords, we might be just a little better at predicting the future, the truth is that we seem to be worse at it.

Forget presidential politics for a moment, which has many in both parties scratching their heads. Wasn’t it just a few years ago that the wise ones predicted, with the increasing purchasing power of the lower and middle classes in China, India and the rest of the developing world, that prices of oil, wheat, soybeans, copper and other commodities were going to go through the roof as scarcity took hold rather than through the floor?

Interestingly, what’s at work around much of the country — in New Orleans, for example — is not exactly what’s at work in South Florida, where it’s a little more complex and nuanced.

South Florida’s trade for 2015 totaled $106.85 billion, down 8.07 percent and the lowest total since it last failed to top $100 billion, in 2010. It is also the second largest decline in South Florida history, trailing only the $11.15 billion decrease in 2009, the onset of the Great Recession.

Exports fell for the third consecutive year, to $58.60 billion, the lowest level since 2009, while imports fell for the second consecutive year, to $48.25 billion, the lowest total since 2011.

The South Florida trade surplus, almost always the largest in the nation for the past two decades, has dropped to $10.34 billion, its lowest level since 2006. The nation’s largest trade surplus for the first time is Houston, of all places, at $24.09 billion. Refined petroleum exports, including from domestic oil sources, are the reason. In 2008, Houston had registered a deficit of $61.14 billion.

South Florida’s balance of trade, which often moves in tangent with a surplus or deficit, fell to 55 cents on the dollar, its lowest level since 2006 also. Balance of trade measures the percentage of, in this case, South Florida’s total trade that is an export. From 2008 to 2001, it topped 60 percent.

The highest percentage in the nation among leading Customs districts belongs to Seattle, at 57 percent. Boeing aircraft ship out from Seattle, accounting for its surplus. Houston’s percentage ended 2015 at 56 percent

South Florida’s percentage of U.S. trade, which topped 3 percent for three consecutive years, beginning in 2011, fell to 2.85 percent in 2015, its lowest level since 2008. Although it doesn’t sound like a big number, the largest Customs district, Los Angeles, only accounted for 10.51 percent in 2015.

It is also the only Customs district to have accounted for more than 10 percent since 2011, the last time New York City did so.

The price of oil is affecting South Florida slightly — refined petroleum is the leading import into Port Everglades by value, largely from Venezuela. But there are three primary drivers of South Florida’s declining trade since the record $126.62 billion in 2012, the year South Florida broke into the nation’s list of top 10 Customs districts. Those are gold, computer chips and Brazil.

A quick recap: The value of gold imports and exports rose rapidly during the global economic crisis but have faltered as the U.S. economy stabilized. At the moment, that is hurting South Florida trade with Colombia. Computer chip imports from Costa Rica tumbled this year after Intel shifted manufacturing to Malaysia and expanded into Vietnam. So, neither of those are connected to oil or commodity prices.

Brazil is complicated. There’s political turmoil on top of economic turmoil. But, to an extent, its economic problems, which can quickly magnify political problems, grew out of China’s diminishing appetite for Brazil’s abundant commodities. China, not the United States, has been Brazil’s largest trade partner for a number of years.

But Brazil is also South Florida’s largest trade partner, accounting for 13.33 percent of all trade and, more importantly, 16.53 percent of all exports in 2015. In 2014, Brazil accounted for 19.86 percent of all exports.

In addition to declining trade at No. 1 Los Angeles, No. 2 New York City, No. 6 New Orleans, No. 7 Houston and No. 12 South Florida, it is also off at No. 4 Detroit, No. 5 Chicago, No. 10 Cleveland and No. 11 San Francisco.

Detroit is Canada’s largest trade partner and Canada is the United States’ largest provider of oil. Chicago is the nation’s second-largest trade partner with China after Los Angeles; Cleveland does twice as much trade with any nation, including No. 2 Canada — the largest provider of U.S. oil. San Francisco’s largest trade partner is China; its largest import oil.

The four biggest winners in the top 15 were Atlanta/Savannah, which got a bump from the strikes that affected Los Angeles trade last year, as trade from China and Asia looked for alternatives and found one in the Port of Savannah; Laredo and El Paso, Texas, which benefited from U.S. trade with Mexico, which continued to be robust; and Charleston, which saw increases in trade with China, Japan and Germany.

In coming columns, I will dissect South Florida exports, imports, and the trade at the three largest “ports” in the South Florida Customs district, PortMiami, Port Everglades and Miami International Airport.

Reach Ken Roberts, president of World City, at kroberts@worldcity web.com. Twitter: @tradenumbers

Final 2015 trade was off at 11of top 15 Customs districts

Total trade

2015

2014

1-year

change

1-year

change

10-year

change

10-year

change

Rank

All districts

$ 3,746,261,185,528

$ 3,968,217,128,492

-$221,955,942,964

-5.59%

$1,171,724,852,444

45.51%

1

Los Angeles

$393,757,103,091

$417,751,823,245

-$23,994,720,154

-5.74%

$99,888,487,530

33.99%

2

New York City

$369,935,166,208

$386,784,843,080

-$16,849,676,872

-4.36%

$102,349,886,924

38.25%

3

Laredo, Texas

$284,333,213,662

$279,832,798,061

$4,500,415,601

1.61%

$145,055,589,947

104.15%

4

Detroit

$244,156,591,423

$261,807,274,271

-$17,650,682,848

-6.74%

$14,222,729,073

6.19%

5

Chicago

$201,581,683,736

$210,703,456,637

-$9,121,772,901

-4.33%

$92,965,016,201

85.59%

6

New Orleans

$199,728,092,394

$233,939,502,596

-$34,211,410,202

-14.62%

$69,358,929,497

53.20%

7

Houston

$196,427,382,675

$252,457,453,380

-$56,030,070,705

-22.19%

$59,976,211,842

43.95%

8

Seattle-Tacoma

$154,769,901,469

$152,546,424,973

$2,223,476,496

1.46%

$58,980,506,120

61.57%

9

Atlanta/Savannah

$148,609,063,236

$141,823,853,958

$6,785,209,278

4.78%

$76,063,486,750

104.85%

10

Cleveland

$129,641,323,343

$131,718,910,708

-$2,077,587,365

-1.58%

$59,825,915,785

85.69%

11

San Francisco

$117,918,194,471

$129,274,546,140

-$11,356,351,669

-8.78%

$18,966,161,373

19.17%

12

Miami

$106,851,863,685

$116,236,782,002

-$9,384,918,317

-8.07%

$40,953,791,956

62.15%

13

El Paso, Texas

$97,929,531,895

$91,211,653,060

$6,717,878,835

7.37%

$50,007,732,708

104.35%

14

Buffalo

$88,581,705,545

$93,914,017,071

-$5,332,311,526

-5.68%

$10,980,147,681

14.15%

15

Charleston

$78,872,200,534

$74,665,464,387

$4,206,736,147

5.63%

$30,827,128,503

64.16%

Source: WorldCity analysis of U.S. Census Bureau data

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